Domestic stocks continued to languish and hover near intraday low in mid-afternoon trade. At 14:22 IST, the barometer index, the S&P BSE Sensex, was down 393.05 points or 1.16% at 33,617.71. The Nifty 50 index was down 125.90 points or 1.2% at 10,326.40. Today's slide was led by L&T, SBI and Tata Steel. Auto stocks declined. Most FMCG stocks edged lower. The recent detection of a massive fraud at a Mumbai branch of the state-run Punjab National Bank (PNB) continued to weigh on sentiment.
The Sensex was trading well below the psychological 34,000 mark after drifting below that level in early trade. A bout of volatility was seen in early trade as the key benchmark indices opened higher but quickly erased gains to sink in the negative zone. Stocks extended slide and hit fresh intraday low in morning trade. Key benchmark indices hovered in negative zone in mid-morning trade. Selling aggravated and indices nosedived to hit fresh day's low in afternoon trade.
The S&P BSE Mid-Cap index was down 1.72%. The S&P BSE Small-Cap index was down 1.57%. Both these indices underperformed the Sensex.
The broad market depicted weakness. There were almost four losers against every gainer on BSE. 2,151 shares fell and 552 shares rose. A total of 129 shares were unchanged.
Auto stocks declined. Mahindra & Mahindra (M&M) (down 2.79%), Tata Motors (down 1.34%), Maruti Suzuki India (down 1.3%), Eicher Motors (down 1.66%), Ashok Leyland (down 1.6%), Escorts (down 2.42%), Bajaj Auto (down 1.87%), Hero MotoCorp (down 1.16%) and TVS Motor Company (down 0.37%) edged lower.
Most FMCG stocks edged lower. Tata Global Beverages (down 3.5%), Britannia Industries (down 1.18%), GlaxoSmithkline Consumer Healthcare (down 0.59%), Colgate-Palmolive (India) (down 0.66%), Dabur India (down 0.94%), Hindustan Unilever (down 1.19%), Nestle India (down 0.93%), Procter & Gamble Hygiene and Health Care (down 0.78%) and Jyothy Laboratories (down 1.33%) declined. Marico (up 0.15%), Godrej Consumer Products (up 0.29%) and Bajaj Corp (up 0.35%) rose.
Punjab National Bank (PNB) lost 8.64% to Rs 114.80, extending recent losses triggered by the bank detecting a $1771.69 million fraud at a single branch in Mumbai. PNB made the announcement before trading hours on 14 February 2018. Shares of PNB fell 9.81% to settle at Rs 145.80 on 14 February 2018. The stock has fallen 28.49% in four trading sessions from its close of Rs 161.65 on 12 February 2018. The domestic stock market was shut on 13 February 2018, on account of Mahashivratri.
PNB announced before trading hours on 14 February 2018, that it detected some fraudulent and unauthorised transactions (messages) in one of its branch in Mumbai for the benefit of a few select account holders with their apparent connivance. Based on these transactions, other banks appear to have advanced money to these customers abroad. In the bank these transactions are contingent in nature and liability arising out of these on the bank shall be decided based on the law and genuineness of underlying transactions. The quantum of such transactions is $1771.69 million (approximately). The matter is already referred to law enforcement agencies to examine and book the culprits as per law of the land. The bank said it is committed to clean and transparent banking.
PNB clarified after market hours on 15 February 2018, that on 16 January 2018, the partnership firm of Nirav Modi group approached PNB branch at Brady House, Mumbai and presented a set of import documents with a request to allow buyers' credit for making payment to the overseas suppliers. Since there was no sanctioned limit in the name of the above firms, the branch officials requested the firms to furnish at least 100% cash margin for issuing Letter of Undertaking (LOU) for raising buyer's credit. On denial, the firms contested that they have been availing such transactions since past several years.
Kwality advanced 4.01% to Rs 88.10 after the company said its board at a meeting held today, 19 February 2018, approved conversion of convertible warrants. The announcement was made during market hours today, 19 February 2018.
Kwality's board approved conversion of one convertible warrant into 21.69 lakh shares at a price of Rs 115.22 per share aggregating to Rs 25 crore, allotted to Bennett, Coleman & Co. The board also approved conversion of one compulsorily convertible debenture (CCD) into 12.15 lakh equity shares at a price of Rs 115.22 per share aggregating to Rs 14 crore, allotted to HT Media.
Overseas, European shares were trading higher in early trade. Asian shares rose as sentiment improved gradually from a recent shakeout that stemmed from fears of creeping inflation and higher borrowing costs. Markets in China, Hong Kong and Taiwan remain closed for the holiday. US markets will be closed today, 19 February 2018 in observance of Presidents Day.
Japanese exports rose for a 14th straight month in January 2018, helped by continued demand from Asia for equipment to make semiconductors, data from Japan's finance ministry showed today, 19 February 2018. Exports grew 12.2% in January from a year earlier, following a 9.3% year-on-year gain in the previous month.
In US, the Dow industrials and S&P 500 logged their sixth straight advance on Friday, 16 February 2018 but the Nasdaq lagged its peers, as political drama sparked turbulent trade late in the session. Special Counsel Robert Mueller announced the indictments of 13 Russian nationals and three Russian entities, accusing them of interfering in the 2016 US presidential election. The indictment said the defendants were supporting Donald Trump's campaign and disparaging Hillary Clinton.
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